A recent IRS Notice 2023-37, provides guidance on the impact of COVID-19 testing and treatment on HSA eligibility. As a reminder, at the beginning of the pandemic the IRS stated that HSA eligibility would not be jeopardized if first dollar coverage of COVID-19 testing, and treatment were provided. Generally, to be HSA eligible an individual must be covered by an HSA compatible high deductible health plan and no disqualifying coverage.

The only expenses that can be reimbursed prior to satisfaction of the minimum statutory deductible are preventive services including those sanctioned by the ACA and permitted benefits such as dental and vision. The minimum statutory deductibles for 2023 and 2024 are:

For the duration of the pandemic, COVID-19 testing, and treatment could be provided prior to satisfaction of the statutory minimum deductible. According to the recent guidance, the ability to cover COVID-19 testing and treatment prior to satisfaction of the minimum statutory deductible can apply to plan years ending on or before December 31, 2024.Thereafter, these benefits must be subject to the minimum statutory deductible.

Certainly, this is an indication of how seriously the IRS takes the importance of complying with HSA requirements. 

The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. This information is provided as general guidance and may be affected by changes in law or regulation. This information is not intended to replace or substitute for accounting or other professional advice. You must consult your own attorney or tax advisor for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.